Dick Durbin's Backward Approach to FDA Reform

It is a tragedy when a patient suffers or dies because the drugs that could help him are simply not available. In recent years, the number of vital life-saving drugs on the American Society of Health-System Pharmacists’ (ASHP) “shortage” list has been steadily growing, putting thousands of patients at risk.

Sen. Dick Durbin (D-IL) recently announced his intent to “do something” about the shortage. Unfortunately, his proposed policy will do very little to solve the problem, while his demands to expand the power of the Food and Drug Administration (FDA) will almost certainly make the problem worse. If Durbin really wants to “do something” about the drug market he should find ways to cut or streamline the FDA’s regulatory approval process to focus on actual risk, rather than simply force companies to do more paperwork and jump through more hoops.

Sen. Durbin’s proposed reforms would force drug manufacturers to give a six month heads-up to the Department of Health and Human Services (HHS) of an upcoming interruption in the production of “life-saving medications.” Durbin’s bill, the Preserving Access to Life-Saving Medications Act (S. 296), would impose penalties from companies that fail to provide adequate notice of drug supply changes and give the FDA “an opportunity to prevent the shortage, notify providers and develop a contingency plan.” The bill would also require HHS to create and submit to Congress criteria to identify potential drug shortages. It would also require the FDA to work with manufacturers to develop ways to maintain the supply of vital drugs. If the FDA actually does make an effort to work with manufacturers, it could help with the shortage problem; however, the proposal has no enforcement mechanism to make the FDA do so.

There are about 215 medications currently listed on the American Society of Health-System Pharmacists (ASHP) drug shortage bulletin, most of them generics. The bulletin listed only 58 drugs in 2004. That number had risen to 149 in 2008, and to 211 by 2010. What is behind the sharp increase in drug shortages? As my colleague, Gregory Conko, has written, while many factors are involved—such as a disruption in the availability of the raw materials that go into medications—the primary reason behind drug shortages are price controls and regulatory hurdles from the FDA.

The FDA’s heavy-handed oversight of drug manufacturers has become increasingly problematic for the industry—and the rise in drug shortages reflects this. More and more the FDA is taking a “zero tolerance” approach and shutting down drug production facilities for the smallest infractions—including those that did not directly affect drug safety or quality. Furthermore, the FDA’s onerous approval process prevents competing manufacturers from quickly stepping up to fill the demand left when one facility shuts down. The Durbin bill’s requirement for the FDA to “work with companies” will be ineffective as long as the agency’s approval process remains unreformed.

Another major problem for drug companies are price controls on drugs. Combined with the high cost of getting new drugs through the FDA’s approval process, these price controls on generic drugs create slim profit margins and mean that companies have little incentive to spend the money to produce unprofitable, but vital, drugs. In a free market price rises with demand. As a result, some patients switch to different drugs—which companies are then incentivized to produce. As more companies produce the drug becomes less scarce and less expensive. However, this natural ebb and flow of market demands was cut off in 2003 when President George W. Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act, which fixes the price manufacturers can charge to a government estimated average. The number of drugs on the ASHP shortage list skyrocketed soon afterward.

While Durbin is going around promoting his feel-good so-called FDA reform, he is at the same time demanding the FDA be given even more oversight authority. Since part of the reason that vital drugs aren’t produced is because the expensive and onerously slow FDA approval process makes the profit margins unattractive to manufacturers, heaping more responsibilities onto the FDA’s plate will only hurt our nation’s drug market. If Sen. Durbin really wants to reduce some of the factors contributing to America’s drug shortage he should stop his repeated calls to give the agency greater regulatory authority over nutritional supplements and withdrawal his recent demand for the FDA to review and regulate the amount of caffeine in energy drinks.

Sen. Durbin’s schizophrenic proposals for reform may seem like good ideas, but are in fact feel good measures that will ineffective at best. At worst, they will cause considerable harm by increasing the workload of an FDA that is already overwhelmed. If Durbin really wants to help increase the availability of lifesaving drugs, he should stop demanding more government intervention as the solution.

Michelle Minton is a fellow in Consumer Policy Studies at the Competitive Enterprise Institute.